Scoundrels and scandals in the Interior Department

As the last vestiges of laissez-faire capitalism were being lowered into the ground on Wall Street last month, out on the Western edge of the high plains an administrative circus of a similar nature was unraveling. Its center was the Minerals Management Services (MMS) division of the Interior Department, in Lakewood, Colo.

On Sept.10, Earl Devaney, the Interior Department's Inspector General, released a report to Congress that documented -- in lurid and embarrassing detail -- the widespread use of sex, bribes and drugs by MMS employees to lubricate their professional relationships with officials of the oil and mineral industries.

What, you may ask, is the Minerals Management Service?

This is the office responsible for collecting royalties from energy companies that drill for oil and gas on public land owned by you and me. Last year alone, more than $14 billion in royalties was collected by MMS and deposited in our account. We cannot be sure of the real total, however, since MMS accounts are so bungled that no one can be sure if the reckoning is close to correct. Coincidentally, the MMS is also responsible for collecting royalties for resources taken from more than 11 million acres of Indian land.

It's a shame the Devaney report didn't stop with the drugs and orgies, since taxpayers deserve just a little vicarious entertainment along with all the bad news. But while the story's entertainment value was mostly swamped by the meltdown on Wall Street, few of its particulars were lost on the 400,000 plus plaintiffs in a lawsuit known as Cobell vs. Interior.

Indian plaintiffs have been waiting patiently to be paid $47 billion dollars in royalties they allege were stolen from Indian trust lands by government and industry officials since 1887, when Uncle Sam first began to manage Indian resources. For those who have not been following the American saga of Elouise Cobell, a community organizer for the Blackfeet Nation in Browning, Mont., and the lead plaintiff in this case, here's a recap of the highlights of her quest.

In 1996, Cobell filed a lawsuit against the federal government for failing to account for tens of billions of dollars in mineral royalties that were never credited to Indian trust accounts. The suit quickly grew into the largest class-action lawsuit in American history.

Accountants for Price Waterhouse studied the records and concluded that $50 billion in absconded revenues was probably a conservative number. Cobell played it safe and sued for $47 billion.

Federal District Court Judge Royce Lamberth, a conservative from Texas who was appointed by the senior George Bush, oversaw the case until 2006. During that decade, Lamberth cited foot-dragging Interior Secretaries three times for contempt of court.

In 2006, Lamberth had heard enough from federal officials. He was irate, declaring the Interior Department to be "the morally and culturally oblivious hand-me-down of a disgracefully racist and imperialist government that should have been buried a century ago… For those harboring hope that the stories of murder, dispossession, forced marches, assimilationist policy programs and other incidents of cultural genocide against the Indians are merely the echoes of a horrible, bigoted government-past…this case serves as an appalling reminder of the evils that result when large numbers of the politically powerless are placed at the mercy of institutions engendered and controlled by a politically powerful few."

A month after throwing down that gauntlet, Lamberth was removed from the case at the request of the second Bush administration.

On Aug. 7, 2008, Lamberth's replacement, Judge James Robertson, tried to end the case by awarding the Indians $455.6 million. Cobell scoffed at the figure and declared that Robertson's decision would not stand: "It's factually wrong and legally wrong, so we have to challenge it.” Attorneys for the Interior Department filed their own appeal, arguing that Robertson had no right to award the Indian landowners any money at all.

If you look hard enough, eventually you'll find a cool head who can make sense of all this. One such observer is Craig Miner, author of The Corporation and the Indian. He said that the real significance of the federal government's looting of Indian trust funds is this: The money was not only held back from its rightful owners, it was also used to help private industry exploit the mineral wealth on Indian lands.

An honorable people would have brought this shameful story to a just end long ago.

Paul VanDevelder is a contributor to Writers on the Range, a service of High Country News (hcn.org). He lives in Corvallis, Oregon, and is the author of several books. His latest, Savages and Scoundrels: the Untold Story of America's Road to Empire Through Indian Country, is due out in 2009.